AM Best assigns Bank Of China Group Insurance Company’s credit ratings

KUALA LUMPUR: AM Best has assigned a Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ to the Bank of China Group Insurance Company Ltd (BOCGI) Hong Kong.

According to a statement, the outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect the company’s balance sheet strength, which AM Best described as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

BOCGI’s strong balance sheet strength assessment is underpinned by its strongest level of risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio.

The company’s adequate operating performance is supported by a five-year average return-on-equity ratio of 8.4 per cent.

Overall net profit is mainly supported by investment returns from BOCGI’s share of associate companies and a stable stream of interest and dividend income, although its combined ratio was above 100 per cent over the past five years (2015 to 2019). This year, the company conducted a portfolio review exercise and trimmed its nonperforming books and channels.

While future premium growth is expected to be steered by direct and inward property reinsurance business, AM Best views the inward property book’s catastrophe exposures as potentially adding volatility to the company’s overall underwriting performance.

BOCGI ranks as the sixth largest insurer in Hong Kong’s non-life market, based on a 3.4 per cent share of direct premium written in 2019.